fringe benefits tax on cars

Ah, the dreaded Fringe Benefits Tax (FBT) on cars — the government's way of reminding you that your company car is a perk, not a freebie. In Australia, FBT applies when an employer provides a vehicle for private use. The taxable value is usually calculated using the statutory formula method, which is 20% of the car’s base value regardless of kilometres driven, or the operating cost method, which is more complex.

FBT can be a hefty burden, so businesses often have to decide if the convenience of a company car outweighs the tax hit. For the curious, new car prices vary widely but expect somewhere between $20,000 and $100,000 AUD, while used car prices can be found on Tradingpost or CarShowroom.